Error sources affecting the calibration and operational use of a 10 cm altimeter are examined to determine the magnitudes of current errors and the investigations necessary to reduce them to acceptable bounds. Errors considered include those affecting operational data pre-processing, and those affecting altitude bias determination, with error budgets developed for both. The most significant error sources affecting pre-processing are bias calibration, propagation corrections for the ionosphere, and measurement noise. No ionospheric models are currently validated at the required 10-25% accuracy level. The optimum smoothing to reduce the effects of measurement noise is investigated and found to be on the order of one second, based on the TASC model of geoid undulations. The 10 cm calibrations are found to be feasible only through the use of altimeter passes that are very high elevation for a tracking station which tracks very close to the time of altimeter track, such as a high elevation pass across the island of Bermuda. By far the largest error source, based on the current state-of-the-art, is the location of the island tracking station relative to mean sea level in the surrounding ocean areas.